Jaguar Land Rover will commit to investing hundreds of millions of pounds to prepare its Castle Bromwich plant to build electric cars, ahead of a wave of new battery models it hopes to make in the UK.
The carmaker has scheduled a six-week shutdown at the site to install a new range of tooling that will allow it to make battery cars.
The replacement for the XJ, the flagship Jaguar saloon used by several government ministers including business secretary Greg Clark, is expected to be fully electric and made at the site.
An announcement about the electric investment in expected on Friday, and was first reported by the Sunday Times.
It is a boon for Britain’s largest carmaker, which is cutting 4,500 jobs amid a £2.5bn turnround plan, and helps secure the Castle Bromwich Jaguar plant, which has laid off staff and moved to a four-day week amid crumbling demand for the saloon models made at the site.
Last year the business posted a £3.6bn loss after taking a £3.1bn accounting hit to the value of its models and investments.
The company has been hurt by sliding demand for diesel, which makes up 90 per cent of its European and British sales, as well as falling sales in China and a model line-up that sees many of its vehicles compete directly against one another.
The move is a fillip for the UK’s embattled auto industry, which has struggled to attract new investment and models because of uncertainty over the country’s future relationship with Europe.
To survive in the coming decades, Britain’s car facilities will need to pivot to electric, something made more challenging by the lack of a UK battery plant.
Nissan already manufactures the electric Leaf car in Sunderland, while BMW will assemble the electric Mini in Oxford, albeit using imported German batteries.
But the Jaguar I-Pace, the brand’s first electric car that has accrued a number of awards including World Car of the Year, is made in Austria by contract manufacturer Magna Steyr, in part because of the lack of a suitable UK supply chain.
The extent of government support for the Jaguar project is not yet known, although typically around 10 per cent of a venture’s cost is support by taxpayer funds.
When Toyota spent £240m at its Burnaston plant for new tooling, it was supported by a government investment of £21m. Peugeot’s £100m investment in its Luton van site included £9m of government support.
JLR has previously stated it wants to make electric cars in the UK, but complained about a lack of supply chain.
It recently opened an electric drive facility in Hams Hall, and makes some hybrid engines at its Wolverhampton engine plant.
